Are you set for life? Do you already have a passive income or a plan to finance your retirement? The days of state pensions are long gone. Just how would you pay for “life” if you stopped working tomorrow? How long could you last? And what would you do with that free time?
For most of us, it’s a ‘work till we drop’ world. It’s up to us to find a little gold for our golden years, but how much do you need to retire without worries? Not so long ago, the magic number was $1 million. Reaching millionaire status by forty was once considered a ‘set for life’ situation for most people. Nowadays, that number is more like $5 million.
Let’s do the math. A 20-year-old would have to save $2000 per month for the next 40 years just to reach $1 million. A 60-year-old with one million could live a modest but comfortable life for around 20 years without ever worrying about money. Sounds good, but let’s be realistic, how many people can afford to save that kind of money? Do you really want to save till you are 60 just to retire? It would mean denying yourself something today, so you could have something tomorrow. There has to be another way. In fact, there is.
Could you live on $1000 per week? It’s not that much, depending on where you live, but if you’re willing to skip the yacht and helicopter, a monthly living allowance is perhaps a more realistic option for financing your retirement. It’s the goal of many corporate managers reaching the end of their shelf life, and it’s called a ‘passive income’ by those that have it. But what is a passive income?
A passive income, in simple terms, is when you earn money without doing anything for it. Achieving a passive income is possible in many ways. For example, a small shop owner working from morning until evening might call himself the owner, but his earnings are based on the time worked. Clearly not a passive income. But if that shop owner opens two more locations and hires managers to run them, then he has a passive income.
Each shop makes a profit. The owner might keep 35% for himself from each shop, and pay each manager the remaining 65%. The owner no longer needs to work, but still earns a monthly income. That’s one example of a passive income.
The first step for you is to expand your knowledge. Just about every successful entrepreneur spends a lot of time reading and learning. Think of an industry or field that interests you personally. How can you use your abilities and experience in concert with that opportunity to create a lasting income? Can you expand your knowledge even more?
For anyone moving into the entrepreneurial arena, they should expect at least 3 to 5 years of late nights and busy weekends before they see any major return on investment. Patience is key.
Let’s see how well you know yourself. Write down your most valuable skills and experience on a sheet of paper and then put your personal interests at the bottom. Include everything you can do well or naturally.
Now get another sheet and start writing down business ideas. Include the strange and ridiculous for now. Try to add 10 ideas to the list every day for a month. At the end of the month, cross out the most ridiculous and the most complicated ideas. What remains is your gateway to a passive income.
Tip: don’t overlook or dismiss ideas that need large startup investments. Imagine a garden covered in garbage and weeds. You need money to buy tools, seeds, and plants, but you can clear away the mess immediately. Do everything you can first, expect the money later. If the idea is good, investors will find you.
Try starting your list this weekend. The list will likely provoke many questions. Most of the answers are just around the corner, but you’ll find them when you need them if you just start moving forward.
Some people don’t have work or life experience that can translate into an entrepreneurial enterprise. Other people just don’t want to spend half a decade working day and night just to get started. For those people, another option might be to start trading on the foreign exchange market (forex).
As with any business, you’ll need to spend a little time investigating. You’ll also need some startup capital. A forex investment deposit can start from as little as $1. Compare that to the startup costs of a high street business. You can learn and practice online as often as you please, and less than a week’s salary is enough to get off to a good start. The learning curve is much faster too. You won’t need to wait five years to start seeing a return on your trades.
Take a look at this 20% strategy and see whether it’s something you might want to try.
To demonstrate these 5 points:
Your goal is to increase your daily budget by 20% before the end of each day. Whenever you succeed, that profit is added to your total balance. The next day, you take 20% of your slightly higher account balance and invest with your slightly higher daily budget. With each successful day’s trading, your balance rises.
Trying to make $20 per day sounds a little low, but you might be surprised to find out that the cumulative effect (aka compound effect) of a 20% increase gives a daily income of $656 after just three months. In six months, a 20% increase would turn that $500 investment into $559,677, and that figure would double just two weeks later. Alternatively, you might prefer to stop increasing your trading budget after 36 days, which would, on a daily average, hold at the target income of $2500.
If it sounds a little too fantastic, it’s because it is. The math is right and true, but it’s extremely unlikely that you could increase your trading budget by 20% every single day. Losing your entire budget for the day is going to happen from time to time, therefore reducing the budget for the next day and slowing the compound effect. Also extremely unlikely is that you somehow manage to lose all your trades, every single day, which would wipe out your trading account in just over three months. When thinking realistically, try to set your personal goals somewhere between the two extremes.
Now all you have to do is take the first step. Your talents as a trader will grow over time, and you can set new goals as you advance, but remember that risk of loss is always present, so try to avoid increasing your daily budget prematurely. Trading is not a passive income, but a trader from home can devote as much or as little time to “work” as they please.
The first month should be experimental. Exness has a demo account you can practice with. Give it a try for a few days before starting with a modest goal. Whether choosing to improve your salary, start your own company, or trade for a living, the cause and effect are simple. Learn new things, do new things, and new things will come into your life.
Ready to try trading on a free account?